Why Closing a Credit Card ‘Responsibly’ Can Still Hurt You a Decade Later

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You paid off your balance. You called the issuer. You got confirmation in writing. By every standard definition, you closed your credit card responsibly — and yet, years down the road, you could still be paying for it in a few different ways.

The truth is, shutting down a credit card isn’t always a smart move. In fact, in the long run, it can seriously hurt your credit score. Here’s what to know.

Your credit utilization math changes

When you close a card, you don’t just lose a way to earn rewards — you lose available credit.

Let’s say you have two cards with $10,000 credit limits and close one of them. Your available credit just got cut in half — which means your credit utilization ratio just doubled.

That can have a big effect on your credit score. Credit scoring models generally like to see utilization below 30%, and the best scores tend to belong to people in the single digits.

Closing one card can push you over a threshold you didn’t realize you were close to. It won’t show up as a ding on your report, either — it’ll just quietly drag your score down over time.

Your average account age could drop

This is where the decade-later part gets real.

Another factor in your credit score is the average age of your accounts — longer is better. And a card you’ve held for years doesn’t disappear from your report as soon as you close it. Closed accounts typically age off your credit report within seven to 10 years.

So if you closed a card today that you’d held for a decade, you might not feel the full credit age hit until the mid-2030s. By then, you’ve probably forgotten about that card entirely. But your credit score hasn’t.

Want to find a credit card you can keep for the long run? Check out our list of the best no-annual-fee cards available now.

Your credit mix could get worse, too

Utilization and account age get most of the attention, but closing a card can also affect your credit mix — the variety of account types on your report.

Credit mix accounts for about 10% of your FICO® Score, and lenders like to see that you can manage different kinds of credit responsibly. If the card you’re closing is one of your only lines of credit, that’s worth factoring in.

Alternatives like student loans or a mortgage won’t fill that gap, either. It’s a smaller piece of the puzzle, but for someone already working to build or repair credit, it can make a difference.

Your easy guide to closing a credit card

None of this means you should keep every credit card forever. If a card’s got a steep annual fee you can’t justify, if it’s creating overspending temptation, those are real reasons to close it.

At the same time, there are some long-term credit consequences to keep in mind. Here are things to do before closing any card:

• Check whether the card is your oldest account (or one of them)
• Calculate how losing that credit affects your overall credit limit, credit mix, and utilization
• Consider a product change instead of a full closure if the issuer allows it

A few minutes of planning today can prevent a head-scratching score drop years down the line.

And if you’re in the market to replace a card you’re leaving behind, our list of the best credit cards available now is a good place to start.

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